Players Make Upside Push

Players Make Upside Push  Yesterday was almost a replay of Wednesday’s action, when the Mysterious
Futures Man showed up at 3:30 p.m. to close the S&P 500 cash right at its 50-day moving average.

Yesterday, the SPDRs (SPY) made their first low of 123.72 right after a gap opening at
124 1/16, and then made the first high of the day at 125 1/8 all in the first 40 minutes
of trading. The tail wagged the dog again (Globex futures trading), and stocks gapped to the

So what happened next? The market went into a dull trading range which resolved itself in a
new low in the SPDRs of 123 1/4. The Mysterious Futures Man saw this and came to the rescue;
once the market traded back above the first low of 123. 72, he never looked back and took the
market to new highs of 125.50.

This week has been very strange for the averages, as was last week. It’s no coincidence
that figures released yesterday showed program trading accounted for 21 percent of NYSE average
daily volume last week (normally it runs 15-17 percent).

The key point is that regardless of how you enter a trade, you’re wrong unless proven right.
Programs and S&P futures manipulation control your short-term destiny. Long-term, if a company
sells widgets and makes money, the stock will do fine. You must read the daily dynamics
of the market and be sure to use quick exits when your position turns south.

Target Stocks Of The Day  Drug stocks look like they want to push to new
highs if the institutions come back to this market. American Home Products [AHP>AHP] closed at
new highs yesterday–look for follow-through today.
Pfizer [PFE>PFE] and Alza [AZA>AZA] look good on continuation moves above yesterday’s highs.
Bristol Meyers [BMY>BMY] could get moving above yesterday’s high, but more importantly, a
breakout from a two-month symmetrical triangle above 66 could be a great position play.

EMC [EMC>EMC] did well for us yesterday, and could follow through above yesterday’s high.
Watch the stock, not all the garbage news about Dell and IBM. Amgen [AMGN>AMGN] could really
fly above
yesterday’s high on a breakout of a cup-and-handle formation. The institutions see this, and if
they can break this stock out they will–it’s one of their key names.

Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click
on the link below to go to his new series of tutorial articles.